The Chief Financial Officer (CFO) is a senior executive whose job is to oversee the company’s finances. As a c-suite member or the highest ranking decision maker in an organization, the Chief Financial Officer is expected to take on a variety of responsibilities that focus on the company’s financial health and growth, including planning and financial analysis, monitoring expenses and income.
In addition, other duties of the CFO are reviewing financial performance reports, managing and tracking liquid assets, assessing investments, and also analyzing the company’s overall financial condition.
Becoming a CFO is not only because you are heard, but there are also many tasks that must be carried out. However, does Sinaumed’s know what a Chief Financial Officer (CFO) is ? Approximately how much is the salary of a CFO? Let’s look at the explanations that have been summarized below.
Definition of Chief Financial Officer (CFO)
In the financial industry , the Chief Financial Officer (CFO) is the highest ranking position. Meanwhile, in other industries, the CFO is often seen as the person with the second highest rank after the CEO in the company.
The Chief Financial Officer himself will be in charge of directing the goals, objectives, and also the company’s financial budget. If you work as CFO in a company, you will oversee the investment of funds held by the company and also assess and manage the associated risks.
Apart from that, you will also be tasked with overseeing cash management activities, implementing a capital raising strategy to support company expansion and also handling mergers and acquisitions. Most Chief Financial Officers are also responsible for managing the company’s investments and will later sit on the board of directors.
If you work as the Chief Financial Officer in a smaller company, you will likely be expected to perform a variety of accounting tasks. Meanwhile, executives in large companies will generally be tasked with reviewing reports and data from various divisions within their company.
Responsibilities of the Chief Financial Officer
A professional Chief Financial Officer has a strategic mindset. They will be able to project a picture of a company’s long-term finances and make those finances more developed based on solid analysis.
Identifying which areas of the company are more efficient, and leveraging certain areas, is critical to the growth and success of the company. The CFO is able to identify and execute well-thought-out financial plans and tax strategies.
Because, it is very important for the success of a company. They are members of the management team and are responsible for overseeing and improving the company’s operations and financial activities.
The Chief Financial Officer will spend their time assessing long-term risks and financial opportunities, increasing the company’s earnings, making improvements to profitability, implementing new revenue strategies, and also overseeing the course of cash flow. This includes both daily analysis and long-term analysis. The following are some of the responsibilities of a Chief Financial Officer , including:
- Work with project managers on new ways to increase profitability
- Support marketing and sales teams
- Help raise capital
- Manage the course of internal cash flow
- Oversee and also support short term and long term strategic planning
- Coordinate with financial advisers
- Involved with multiple assignments and also financial projects
A good Chief Financial Officer is a cross-functional leader and will carefully consider how decisions made will affect other departments or divisions in the company.
This is because the Chief Financial Officer is very familiar with all members of the company. They are someone who can identify problems and situations early on and may see things that others miss. Therefore, usually CEOs will rely on the CFO as a company early warning system regarding any problems that need to be addressed.
Duties of a Chief Financial Officer
If explained in detail, the CFO has a lot of duties and authority. However, the points below are an outline of the set of duties and authorities that a CFO usually performs in his work.
1. Supervise the Company’s Finances
The Chief Financial Officer will be responsible for reporting financially in a detailed, detailed and accurate manner to stakeholders. Therefore, they are obliged to supervise the implementation and financial management of the company so that it runs according to the results of the agreement and plans.
2. Perform treasury duties
The CFO is a leader engaged in treasury duties, namely determining the company’s financial policies in accordance with the conditions of the company. Debt plan investment objectives as well as analyzing financial risks will be the responsibility of a Chief Financial Officer .
3. Creating a Company Economic Strategy
As the two points explained above, the CFO is required to understand various situations related to the company’s finances. Therefore, they must be able to identify and submit an effectiveness report on the company’s strategy. Usually, the CFO’s duties do not deviate from what has been described above.
Even though it looks very complex, you can conclude that this CFO has general responsibility in ensuring whether the company can run well or not. This must be supported based on the policies and also the analysis carried out by the CFOs as their job.
The role of the Chief Financial Officer
According to the Deloitte report, traditionally, this CFO has had two service roles, namely preserving organizational assets by minimizing risk and successfully managing bookkeeping, and the operator’s role, carrying out stringent related financial operations that are effective and efficient.
This role was originally conceived as a more back-end and fiduciary function with the Chief Financial Officer being tasked almost exclusively with quality control, compliance, producing, and analyzing company finances.
However, this Deloitte research shows that the role of the CFO is growing. With the digital economy and rapidly changing technology, as well as increasing economic uncertainty and investor scrutiny, the role of the Chief Financial Officer is becoming more forward-looking as well as exiting with a focus on value and business opportunity.
For this reason, in addition to being a servant as well as an operator, the Chief Financial Officer must also be a strategist, assisting in shaping the strategy, as well as the direction of the company as a whole, and acting as a catalyst to foster a company-wide approach and financial mindset to help business segments. others get better.
Today, the Chief Financial Officer is a trusted advisor to the CEO as well as a business partner. Often they serve as the critical intermediary between the back office , C-Suite , and the frontline business units of a company. The CFO plays quite an important role in helping shape the company’s long-term goals.
In addition, the CFO also acts as a diplomat with third parties. Because, they will be required to continue to ensure the financial sustainability of the company. Therefore, the Chief Financial Officer is the face of a company’s sustainability for customers, vendors, bankers, as well as other stakeholders.
For more details, the following are several points of explanation regarding the role of the CFO in the company, including:
1. Administrators
As an administrator, the CFO must be able to know, maintain, and record all assets owned by the company. Maintaining assets here means they have to ensure that all assets can provide results for the company. Therefore, the right decision is important if there are assets that are less profitable for the company.
2. Catalyst
Catalyst here means as a driving force so that something can happen. In this case, a CFO acts as a catalyst, which means they must be able to stimulate various developments so that the business can run for some time to come. This goal can be accomplished by providing various kinds of policies related to finance. That way, the company’s expenses can have an effective value, but the results are still maximum.
3. Operators
The role of the Chief Financial Officer as an operator is to carry out various operational tasks that are carried out on a daily basis in the financial sector. Such tasks, for example, are carrying out financial records, matters related to taxes, forecasting, and so on.
4. Strategy Giver
In providing a strategy, a CFO must be able to provide the right strategy for finance which is an important component of the company. This kind of formulation can indeed be done with other company leaders, but a CFO must be able to analyze it for his own company.
Qualification of Chief Financial Officer
In this fast-paced business environment, the Chief Financial Officer is less a corporate accountant and a more multifunctional executive with financial skills. The automation of this accounting function has reduced some of the accountant’s duties in the Chief Financial Officer role , but the position still requires considerable financial management experience and academic training in accounting and finance.
This Chief Financial Officer qualification is often an MBA or master’s degree in business administration in accounting, finance, as well as related fields, CPA or certified certified public accountant, or CMA (certified management accountant). Some CFOs are certified management or certified public accountants.
Often these CFO candidates are expected to have at least 10 years of accounting or finance experience. Five of those years must be held in a managerial role. The Chief Financial Officer must have a solid understanding of GAAP as well as other tax accounting principles and preferably have experience working with or reporting to the SEC.
Along with analytical skills, a Chief Financial Officer must have good communication skills in order to be able to effectively communicate the company’s financial health and strategic goals to the CEO, C-Suite , board members, vendors, and also stakeholders in the company.
In addition, a CFO must also have a vision and foresight that is aligned with the market and trends. This will enable them to create and implement a business plan for the company that aligns with the bigger picture and long term goals of the company.
Deep understanding of the business is a must for today’s CFO. Those who become Chief Financial Officers must also be willing to try new things and take calculated risks to grow the business and improve the overall financial position of the company.
How to Become a Chief Financial Officer (CFO)
Generally, this CFO position requires the candidate to have more than 5 years of experience and at least come from a bachelor’s degree in Accounting or Management. However, it is not uncommon for companies to require candidates for this position to come from master’s degrees.
With big duties and responsibilities, are you still interested in becoming a Chief Financial Officer? If so, here are some ways you can become a CFO, including:
1. Develop Analytical Skills
Becoming a Chief Financial Officer will usually involve more analysis than direct field work. Therefore, good analytical skills are needed to be able to work with large amounts of data. You can study specifically in the fields of economics, law, accounting, and also risk management which will later become a provision of knowledge as a Chief Financial Officer.
2. Have a Desire to Learn
Even though this CFO assignment focuses more on company finances, learning many things also includes provisions that you can bring to become a professional CFO. Learn about how technical work is, the focus of the company’s field, the nature of the company’s investors or clients, and more.
It looks quite simple, but it is often forgotten. Therefore, don’t just focus on learning the big things, but also learn the small things that will help you pass the selection to become Chief Financial Officer .
3. Understand and Follow the Latest Trends
Study and follow the latest trends to see if the business concept that your company applies is still relevant today, even for the next 10 years. The times are growing, of course, business trends will also be more varied. There are many unexpected things that happen in the development of the industrial world. Therefore, you must have a visionary and calm mind to be able to generate profits for the company.
4. Details Oriented
Becoming a Chief Financial Officer will be able to provide quite a big domino effect if you don’t go into details. Just imagine if you write the wrong digits into all documents. The big effect that will be caused will certainly make one company rowdy and have a bad impact in the long run.
Surely that doesn’t want to happen right? So do not be surprised if the nature of detail and caution is one of the characteristics required by a CFO.
Chief Financial Officer (CFO) Salary
From the explanation above, we can conclude that the Chief Financial Officer is a company leader who has a role and responsibility in the financial sector. This consists of planning, matters related to administration, and records at the company where they work.
However, the CFO also has the main task of carrying out financial planning and is responsible for the company’s cash flow. In addition, the CFO must also be able to analyze the financial level that exists within the company to create further policies.
With heavy duties and responsibilities, of course, the salary of a CFO is no joke. Based on research that has been done, a CFO can get a salary of 133 million to 266 million per month.
A very fantastic number for responsibility that is no less fantastic. If calculated for a year, a CFO can get a net salary of up to 2.6 billion . Is Sinaumed’s increasingly interested in becoming a Chief Financial Officer (CFO)?
Closing
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